If bitcoins truly become competitors to the US dollar as a global medium of exchange, it is quite certain that the US government will not be too happy about that. I am opening this thread to explore possible scenarios of hostile action by the US government against the bitcoin infrastructure. After all, the US economic supremacy is partly based on the American monopoly on the supply of dollars and their use as a global currency. The status of the dollar as a global reserve currency allows the United States to simply print paper dollars in exchange of real goods and services from the rest of the world - and that ability is something that the government will probably defend at any costs, including through military means. For example, many believe the war in Iraq was provoked by Saddam's decision to sell Iraqi oil in euros, rather than dollars.

If bitcoin were to become sufficiently popular, I think the US government will likely adopt an extremely hostile position against it. The government can use the experience gained from the RIAA and its attacks on p2p file sharers. Agents of the government may simply join the bitcoin p2p network as regular users, and then record the IP addresses of all the peers that connect to them. Once they have those addresses, and proof that the user is using Bitcoin, it will be very easy to persecute the person behind the IP address - charges can range from money laundering to engaging in trade with enemy states (since the bitcoin network will probably have nodes in Iran). Such actions will either devalue the bitcoin currency, or reduce the bitcoin p2p network to such a small size that it will be easily overwhelmed by a brute force attack of government bots.

Do you think I am being overly pessimistic in contemplating such a scenario? Does bitcoin really stand a chance of becoming a major currency competing with the dollar? Or does it always have to stay under the radar to avoid the wrath of the US government?

The US governments could not do that alone, because it can control only its own territory.

Do you think it can convince other countries to track their citizens and prevent them to run the bitcoin client ?

I doubt so. USA's influence is not that strong.

The US has already been quite successful in pushing the rest of the world to adopt legislation to curtail p2p file sharing. It would probably be able to achieve the same with p2p currencies, unless the other states support bitcoin. But what incentive would they have to support a currency over which they will exercise absolutely no control, and that will compete with their own national currency? Unless a major nation state steps in to support bitcoin, I don't see how it will be able to withstand the pressure from the American government.

The US governments could not do that alone, because it can control only its own territory.

Do you think it can convince other countries to track their citizens and prevent them to run the bitcoin client ?

I doubt so. USA's influence is not that strong.

The US has already been quite successful in pushing the rest of the world to adopt legislation to curtail p2p file sharing. It would probably be able to achieve the same with p2p currencies, unless the other states support bitcoin. But what incentive would they have to support a currency over which they will exercise absolutely no control, and that will compete with their own national currency? Unless a major nation state steps in to support bitcoin, I don't see how it will be able to withstand the pressure from the American government.

They don't have to "support" bitcoin they just have to not eliminate all internet freedom. Which many may not want to do if they could since the internet enables huge quantities of taxable trade.

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Given how eager some supposedly liberal western governments (like Britain and Australia) are to push for internet filters, I don't see how they would uphold internet freedom. They can simply say "child pornography", and the masses will support any action they might take to curtail internet freedom.

Given how eager some supposedly liberal western governments (like Britain and Australia) are to push for internet filters, I don't see how they would uphold internet freedom. They can simply say "child pornography", and the masses will support any action they might take to curtail internet freedom.

Or they can approve a law with the orwellian title of "net neutrality" to end net neutrality and a lot of people will support it.

Government crackdowns acted like something of an evolutionary pressure; for every filesharing network that was successfully destroyed, a new generation of better, stronger ones sprang up.

Napster relied on a single centralised server. The government shut down the server. Result? Several Napster clones that could support multiple servers. Then the government started taking down servers one by one. Result? Serverless technology. Then the government started prosecution of individual users. Result? Proliferation of VPN providers and pseudonymous p2p. And so on....

I doubt we would have a lot of innovative technologies today (eg. i2p, tor, bittorrent) if governments simply had left Napster alone. Talking about unintended consequences!

Conclusion:

Government may succeed in destroying the current block chain. It may even succeed in destroying the current implementation of the Bitcoin protocol. But it will never destroy the source code, the meme, the spirit, and the community. The p2p cryptocurrency genie is out of the bottle.

Decentralized P2P infrastructure is Bitcoin's strength. If one were desiring to suppress Bitcoin, are there easier ways? Consider this approach:

Right now, it has become a de facto standard that the "official" price (USD/BTC) is obtained by looking at the market on Mt. Gox. Even on Bitcoin OTC for example, offers are made in amounts relative to the "current market price" on Mt. Gox.

Mt. Gox acts as a spigot for the Bitcoin economy that spews Liberty Reserve USD since withdrawals from Mt. Gox are sent to your Liberty Reserve account number. However there is no comparable inlet for LRUSD. Today, the average Bitcoin participant cannot easily fund an account on Mt. Gox for which to purchase bitcoins. The options available to these participants are to first buy LRUSD outside of Mt. Gox (takes too long, costs too much) or to wire funds to Mt. Gox (takes too long, costs too much) and even then, Mt. Gox buys LRUSD with the funds that were sent.

Thus there is an imbalance between the supply of one commodity (bitcoins) and the supply of the exchange medium (LRUSD MTGUSD). This is visually apparent when looking at the Mt. Gox Matrix: http://bit.ly/mtgoxmatrix

When those bitcoin sellers on Mt. Gox chase the buyers, the only remaining potential buyers are those whose accounts still have funds available in their Mt. Gox account. Those remaining have the luxury of being able to sit on lower bids and let the sellers approach. As the result of this, the price falls. It is thus apparent, in my opinion, that the price at Mt. Gox does not necessarily reflect the supply and demand for bitcoins, but instead reflects the supply and demand for LRUSD MTGUSD.

To control the price of all bitcoins, simply buy bitcoins from sellers outside of Mt. Gox, transfer those bitcoins to Mt. Gox, withdraw in LRUSD, hold onto those LRUSDs by not selling, rinse and repeat.

Ironically, this actually becomes a less expensive endeavor over time as once the price on Mt. Gox starts to drop, the price to buy bitcoins outside of Mt. Gox drops because other markets use Mt. Gox's price as their reference.

It would make sense then that the ability to easily control the price provides the opportunity to suppress rapid adoption of Bitcoin as a currency.

This is an easily employable option that needs no legislation and can be accomplished without any brute force attack / internet filtering, etc.

Manipulation of price for bitcoin is not the problem, but rather the ability for price information is the problem. Shutting down liberty reserve and other way to exchange currencies for bitcoin meant that people no longer have any way of price estimation for bitcoin.

Manipulation of price for bitcoin is not the problem, but rather the ability for price information is the problem. Shutting down liberty reserve and other way to exchange currencies for bitcoin meant that people no longer have any way of price estimation for bitcoin.

That's right, because without such an exchange bitcoin worthless. Becouse for them you can't buy food right now

Manipulation of price for bitcoin is not the problem, but rather the ability for price information is the problem. Shutting down liberty reserve and other way to exchange currencies for bitcoin meant that people no longer have any way of price estimation for bitcoin.

That's right, because without such an exchange bitcoin worthless. Becouse for them you can't buy food right now

What, coffee isn't a food?

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I think the best way to strengthen Bitcoin against attacks is for it to become a more useful medium of exchange. Namely, to be accepted for payment for a wider selection of goods and services. We have a long way to go, but if Bitcoin were accepted as widely as PayPal, there would be substantial pressure against shutting down the entire network. Too many jobs and businesses would depend on it.PayPal processed donations for WikiLeaks, but the Feds didn't shut down the entire payment processor. Certainly governments will pressure exchanges and other centralized components of the bitcoin community, but peer to peer means new components will spring up to replace them.

Broader acceptance of Bitcoin as payment also strengthens the infrastructure. It means more network peers, more mining, more exchanges, more smart developers improving infrastructure. I keep coming back to the first answer to the FAQ, "How to help Bitcoin?": "offer Bitcoin as a payment option at your web shop or service."

Wallet eating viruses. Since there is a fixed number of bitcoins, the system in effect has hit points and consistent wallet attacks could crush the currency by attrition and give rise to something akin to a deflationary spiral.

The nature of the wallet is in my opinion the weakest link of the bitcoin system followed closely by the inability to readily exchange them to other currencies.

I would like to somehow store my wallet in the network itself, or dispense with the wallet entirely somehow, so if my computer is destroyed or I am prevented from accessing it, my money is not destroyed/lost.

This problem will only get worse over time when one realizes the majority of Internet connected devices on the planet are phones, this pretty much assures us that eventually we'll have mobile versions of bitcoin, making wallet loss and destruction ever more common.

Forcing end users to secure their wallet file in effect forces them to be techies to feel safe enough to use the currency. This is a non-trivial problem because perception is a huge part of any currency's value. And right now the number one biggest problem I would have in convincing family and friends to use the currency is when they realize they have to treat a file on their computer like a sock full of life savings.

Regardless of the reality of the situation the perception will be that your money could vanish at anytime and as a result of that adoption rate be pressured downward as the acceptance of the currency climbs. Or, as bitcoins become more worth stealing, the anxiety of the wallet file will increase.

to make matters worse there also seems to be a conflict of interest with regard to wallet files and this problem generally since the more coins that are destroyed the more the rest of the coins are worth. We've created a common good problem where it makes individual sense to encourage the destruction of wallets to inflate your own assets.

Wallets need to be made secure and permanent along with the rest of the system, and yet those most in a position to do this are most motivated not to.

In my opinion if bitcoin ultimately fails, this will be why and a cunning government will exploit that truth to disastrous effect.

*facepalm* Why do I bother? Did you even read what I said? It's not that simple. How do I know where I copied it is safe? You are demanding that everyone who uses the currency be tech savvy. I don't care how reasonable you think that demand is because you happen to be tech savvy, it isn't.

The second a common good problem crops up and people are afforded the opportunity to be callous, snide, and unhelpful to new people, they make a career out of it.

You'll change your tune the first time you have your wallet burnt by a DOD professionally crafted virus.

You answer is as dim as saying "don't crash your car" in response to issues of vehicle safety. No one plans on getting in a car wreck and sometimes it's not your fault, worse, sometimes, it's no one's fault.

*facepalm* Why do I bother? Did you even read what I said? It's not that simple. How do I know where I copied it is safe? You are demanding that everyone who uses the currency be tech savvy. I don't care how reasonable you think that demand is because you happen to be tech savvy, it isn't.

The second a common good problem crops up and people are afforded the opportunity to be callous, snide, and unhelpful to new people, they make a career out of it.

You'll change your tune the first time you have your wallet burnt by a DOD professionally crafted virus.

You answer is as dim as saying "don't crash your car" in response to issues of vehicle safety. No one plans on getting in a car wreck and sometimes it's not your fault, worse, sometimes, it's no one's fault.

Sorry, that was too abrupt.

I'm all for making bitcoin easier and safer for the non savvy, I'm not super savvy myself.

My backup is physically separate from my computer. I realize both are vulnerable, but losing both at the same time seems unlikely.

People who can't even do that can get advice, or even have someone else handle their large amounts.

Again, I didn't mean to imply that it shouldn't be considered only that it isn't a fundamental problem imo.

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Do you carry your entire life's savings in your wallet? Most of mine is in one financial institution or another. Trusted third parties will emerge in the bitcoin economy for the purpose of safeguarding your funds.

I also keep my bitcoin "wealth" spread around several different machines, and each of those wallets is backed up in a TrueCrypt vault. For the one publicly-accessible server that I have with a wallet on it, I only keep the minimum necessary balance in it.

"A small body of determined spirits fired by an unquenchable faith in their mission can alter the course of history." --Gandhi

Forcing end users to secure their wallet file in effect forces them to be techies to feel safe enough to use the currency.

A few years ago, this might have been true, but not anymore. Dropbox has millions of users. OS X comes standard with Time Machine. Backup is becoming easier and more common. There are also centralized Bitcoin services such as MyBitcoin which manage your wallet for you. Just like other cloud services, they handle backups and presumably use infrastructure that's far more reliable than most home users have.

By the time Bitcoin is popular enough for viruses to steal wallets, these kind of services will be far more prevalent.

Purchase ~ 100k - 1M Bit coins across 2 accounts.Make a script that automatically send the money between each account using a new addres each time (the addresses would be written to a database where the script could get it from)

If you get 20-40 transactions per second, that would significantly increase the workload as everybody has to verify those payments.

So you would add, lets say 1M transactions that needs to be verified. Lets see, it takes about 15 mins to get two verifications. How long will it takes to get a million?

Purchase ~ 100k - 1M Bit coins across 2 accounts.Make a script that automatically send the money between each account using a new addres each time (the addresses would be written to a database where the script could get it from)

If you get 20-40 transactions per second, that would significantly increase the workload as everybody has to verify those payments.

So you would add, lets say 1M transactions that needs to be verified. Lets see, it takes about 15 mins to get two verifications. How long will it takes to get a million?

Oh snap, selling all coins now. How did we not think of this?

I for one thought that ~150 transactions a day would be plenty. I can't believe we forgot about spam.

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Purchase ~ 100k - 1M Bit coins across 2 accounts.Make a script that automatically send the money between each account using a new addres each time (the addresses would be written to a database where the script could get it from)

If you get 20-40 transactions per second, that would significantly increase the workload as everybody has to verify those payments.

So you would add, lets say 1M transactions that needs to be verified. Lets see, it takes about 15 mins to get two verifications. How long will it takes to get a million?

Purchase ~ 100k - 1M Bit coins across 2 accounts.Make a script that automatically send the money between each account using a new addres each time (the addresses would be written to a database where the script could get it from)

If you get 20-40 transactions per second, that would significantly increase the workload as everybody has to verify those payments.

So you would add, lets say 1M transactions that needs to be verified. Lets see, it takes about 15 mins to get two verifications. How long will it takes to get a million?

I'm consistently surprised that there is some newbie every week who brings this stuff up as if it is some kind of unique revelation.

Yes, we are aware of the spamming issue.

No, it's not really a problem.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Two problems that were brought up don't really work. The first is the question of a worm that attacks wallets. while I agree that the artificial limit at 21 million is a pretty bad idea, a worm that attacks bitcoins would not be effective. A worm would need criteria to use to attack wallets. For example it could use the extension on the file, but that can be changed or hidden in an archive. The worm could be 'smart' and do deep analysis to find and destroy wallets, but wallets can be stored on uneraseable media (a 25c cd is a small price compared to a $2k loss) or the file could be encrypted so as to obfuscate that data. Indeed even a simple xor would effectively mask data from a worm. Finally worms have a hard time actually spreading to do this sort of damage. If a large enough segment of the population uses bitcoins so as to actually cause the government to try to destroy it, then I am sure the number of households w/ the program would be greater than 5%.

The second problem is the idea that the gov traces the individuals involved and prosecutes them. Sure, the average user might be susceptible to that, but a good proxy will protect any individual from simple tracing. To further obfuscate actual locations an onion route could be placed between a node and the end user. At this point trojaning is likely the only route to actually attacking the end user, but this can be avoided by imply following those oft mentioned rules of internet security, or even using a computer only away from home if it will be used for bitcoins. While one may argue that these are 'advanced', I have more faith in the general populaces ability to protect themselves.

Now for what I think is most likely the downfall of bitcoins. The biggest problem with bitcoins isn't the fact that it isn't used for 'common' purchases. After all, the purpose of bitcoin is more one of privacy which is easily given up by purchases in the real world (Uncle Sam knows you used money to buy that car and so that is still taxable). The easiest way to attack bitcoin is to make it impossible, or at least very very difficult to exchange bit coin for USD (or LR, MTGOX, or the like). I have only recently joined bitcoin (I love the idea, though I am wondering about its viability for this reason). I have now discovered how amazingly difficult it is to trade bitcoin for USD via PP or debit. This is further compounded by the fact that I use a prepaid cell and so I cannot verify with the major exchangers so that I can buy LR to exchange for MTGOX. Certainly my situation is unique, but an effective take down of any financial institutions that permit direct BC to USD (or EUR or whatever) would drive the BTC economy underground. In such a situation BTC would survive only as an underground currency that would have to be traded direct between individuals. I highly doubt the voracity of the BTC community to stand with bitcoins in this situation.

Looking for small PP buyers. I will pay all fees involved in the transaction. Send me a message if interested.

Two problems that were brought up don't really work. The first is the question of a worm that attacks wallets. while I agree that the artificial limit at 21 million is a pretty bad idea.

We have 8 digit percison right of the decimal. 21 million bitcoins is not a problem.

I do remember this. However people tend to like things that are either concrete or can be imagined in a concrete manner. The more fractional an ownership is, the less tangible it will be. For example, when buying a stock in the market you are actually buying a very small percentage of a company (often less than .0001% per share). However shares in a company are not referenced in this manner. They are instead reference in discrete units. Likewise, we could buy ant sell fractional pieces of bitcoins, but doing that would probably make their use less attractive for the above reasons. Also as wallets are lost (and they will be lost), many large chunks of bit coins will 'disappear'. While certainly I will take damn good care of my bitcoins, and I presume many other people will, we cannot assume that this is the norm or even if it were that the few would not make unavailable a large percentage of bitcoins. Instead of merely subdividing bitcoins, we should have a plan to add more as time goes on. How we do this without getting rid of the decentralized nature of bit coins (a good feature of BTC in my opinion) is anyone's guess. Never-the-less though, artificial limits are not useful for non-backed currencies.

Looking for small PP buyers. I will pay all fees involved in the transaction. Send me a message if interested.

Going on a "real value" exchange of the global GDP (100 trillion USD roughly) expressed as 21 million bitcoins, a microbitcoin would be worth $4.7 dollars and a nanobitcoin 0.0047 USD or about half a cent.

I do remember this. However people tend to like things that are either concrete or can be imagined in a concrete manner. The more fractional an ownership is, the less tangible it will be. For example, when buying a stock in the market you are actually buying a very small percentage of a company (often less than .0001% per share). However shares in a company are not referenced in this manner.

Citation needed.

Dude, it's called using blah miliBTC if you hate fractional an ownership so much.

I don't think Bitcoin is the ultimate solution. It will eventually disappear and be replaced by a new system. But I still stick to it, because now (and in the near future) it has value. Should a new, better, system be developed I'm sure the two will coexist for a certain time and allow people to transition to the new system, a few will stick to the old system which will lose value while the new one gathers momentum.

We cannot foresee the future, but we can express our trust to the current system by investing in it.

Right now Bitcoin availability for new Users and Services accepting Bitcoins are IMHO the major limiting factors. Acknowledging about the problem certainly the first step to solving it, so keep the brainstorming up ^^

Then people using bitcoin will simply switch to Linux, or have a separate Linux partition just for bitcoin.If you use Linux only with software from signed repositories, it is virtually impossible to catch a virus.

I do remember this. However people tend to like things that are either concrete or can be imagined in a concrete manner. The more fractional an ownership is, the less tangible it will be. For example, when buying a stock in the market you are actually buying a very small percentage of a company (often less than .0001% per share). However shares in a company are not referenced in this manner.

Then people using bitcoin will simply switch to Linux, or have a separate Linux partition just for bitcoin.If you use Linux only with software from signed repositories, it is virtually impossible to catch a virus.

I actually think what Innomen is saying makes a lot of sense. Switching to Linux will not be possible for people who can barely operate Windows. It is not us, the technical people that need to worry about this, but since we try to convince more and more people to start using Bitcoin (for example I got a few of my friends into using Bitcoin, but most of them have no idea how it all works and I doubt they encrypt their wallet with TrueCrypt after every transaction and copy it to five different places), they will be the ones affected by the viruses. Once virus' authors realize there is money in it, they will save no effort to get to one's wallet.

Another VERY important aspect of this is that people need to be aware of the fact that after they copy their wallet into a safe place they should start using a new one. Why? Because most people make backup copies after a new transaction (I personally do that after a big transaction). Now, if an attacker or a virus manages to transfer coins from your account - your backup copy is useless. It's actually better if the virus corrupts your wallet instead of using it (if you have a backup). And, since the wallet is not encrypted, I suppose this is not impossible? Please correct me if I am wrong.

I think the best way to strengthen Bitcoin against attacks is for it to become a more useful medium of exchange. Namely, to be accepted for payment for a wider selection of goods and services. We have a long way to go, but if Bitcoin were accepted as widely as PayPal, there would be substantial pressure against shutting down the entire network. Too many jobs and businesses would depend on it.PayPal processed donations for WikiLeaks, but the Feds didn't shut down the entire payment processor. Certainly governments will pressure exchanges and other centralized components of the bitcoin community, but peer to peer means new components will spring up to replace them.

Broader acceptance of Bitcoin as payment also strengthens the infrastructure. It means more network peers, more mining, more exchanges, more smart developers improving infrastructure. I keep coming back to the first answer to the FAQ, "How to help Bitcoin?": "offer Bitcoin as a payment option at your web shop or service."

agree, winning the hearts of populace should be high on the list of priorities for bitcoin proponents when planning the roadmap.

I don't think Bitcoin is the ultimate solution. It will eventually disappear and be replaced by a new system. But I still stick to it, because now (and in the near future) it has value. Should a new, better, system be developed I'm sure the two will coexist for a certain time and allow people to transition to the new system, a few will stick to the old system which will lose value while the new one gathers momentum.

We cannot foresee the future, but we can express our trust to the current system by investing in it.

Right now Bitcoin availability for new Users and Services accepting Bitcoins are IMHO the major limiting factors. Acknowledging about the problem certainly the first step to solving it, so keep the brainstorming up ^^

whether bitcoin will be an "ultimate solution or not, we probably need to look back human history for some reference, since it is such a revolutionary and disruptive idea. non-fiat honest money system (i.e. commodity currencies) went thru seashells, clay, bronze.... before it settled on gold/silver. I'd also agree that there will be gradual transition periods from one to another.

I am opening this thread to explore possible scenarios of hostile action by the US government against the bitcoin infrastructure.

Certainly there's a patent that shares a concept or two with something that Bitcoin does? I could see the state try to interject on behalf of the patent holder.

I doubt something of that strength will matter much at all. Bittorrent is used over and over and over to distributed works that are 100% copywritten with no ambiguity, but there hasn't been much success shutting that down.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.

I have decided to give this another shot. This is mainly because I love hypotheticals and working out worst case scenarios. (I actually have plans worked out in case aliens ever attack, nuclear war occurs, or a hyper-powerful and vicious government decides to dominate us, and those are only a few of what my overactive imagination has come up with!) Of course I have only taken a few looks at the white paper so if I am missing something, feel free to mention it to me.

From the description of the system, it seems that attacking through the front door via creating a counter-stack would be resource consuming and, quite frankly unrealistic. Indeed it seems that as the blocks build up into large and larger stack, it really would be harder to defeat this system (barring some sort of 'break' of the SHA-256 system if it makes sense to say anything like that). However it also seems obvious that the stack would be easier to overcome if the stack was small and the attackers were given some sort of 'head start' in creating a new one.

Defeating the system in this way would be immensely difficult as the blocks are spread around to each and every node in a distributed and non-centralized manner. Suppose that this really powerful government agency really did decide to set its sights upon bitcoin for summary destruction. If a sufficiently powerful agency were to create a worm with a rootkit and logic bomb payload, then a government or an enterprising techno-mafia could destroy the stack simultaneously (the fact that this is simultaneous cannot be overstated for this plot to work). Once all copies of the stack have been destroyed, any stack could be used to replace it. After all, in this hypothetical situation the stack with the most proof is the stack that has been created from thin air. Also unlike a normal stack attack as mentioned in the white paper, the actions the attacker could do are not limited to returning his own bitcoin to him self. Of course such a situation would probably be highly visible to the world and I doubt much could be done to profit from bitcoins pilfered in this way, but this system could also be used to reduce the total bitcoin to 0 or to place all bitcoins in wallets that no one has the key for.

The most obvious defense against this is to have some sort of back-up system, though how this system could be implemented and yet not be centralized is beyond me (for now).

Let the criticism come.

Looking for small PP buyers. I will pay all fees involved in the transaction. Send me a message if interested.

Of course, this (unlikely) scenario is part of the motivation for regular blockchain benchmarks being encoded into the source code of new releases. So your attacker would still have to come up with a fake blockchain that not only matched those benchmarks precisely without violating any of the other valid block rules on any of his fake blocks and have such a blockchain ready that was at least as long as the benchmark shipped in the latest version before the standing network would receive it.

And if any copy of the real blockchain were to be reintroduced to the network before the fake one could develop a greater total proof-of-work, the real blockchain would force a network split that would eventually destroy the fake one.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

(barring some sort of 'break' of the SHA-256 system if it makes sense to say anything like that).

Even if someone were to come up with some way to 'break' the security of sha-256 itself (not unrealistic, really) that wouldn't actually result in a compromise of the bitcoin blockchain itself. Only if this break remained unknown while an attacker tried to build up a fake chain, or attempt a double spend, would a broken sha-256 be a problem. And even then the problem would be limited to those addresses who had recently done business with the attacker (in the case of double spend attacks). I consider the difficulties of building a fake blockchain that satisfies all of the various transaction, block and benchmark rules to be so high as to not be a problem even if sha-256 were suddenly easily processed by some kind of shortcut.

If the break were widely known, the part of the system for which sha-256 is used is modular, and can be benchmarked and swapped for something else comparable fairly quickly. Also, even this wouldn't expose the security of the address keypair system, which is also modular. If one is broken, the network can agree to suspend processing of transactions until it is fixed, but even that isn't likely to be neccessary. Both being broken at the same time, known only to the same attacker; then we are screwed.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

A lot of the "fantasy" ways of bringing down Bitcoin I can dream of, could be solved with one simple feature: the ability for Satoshi and perhaps a few others to cryptographically vouch for the soundness of any future revisions of the Bitcoin software, and a way for users to easily confirm the soundness of their client.

Many of the denial-of-service threats to Bitcoin are of the type that could be remedied by pushing out an upgrade to the software. The fact that the software MUST be upgraded in the future (e.g. to start breaking BTC into smaller decimals) is a sweet non-technical vulnerability that could be exploited by an adversary.

A coordinated effort to damage Bitcoin need only be a huge FUD campaign as to which is the true and correct client.

I suppose we may already have that in a roundabout sort of way: IIRC there is a Satoshi "message" feature based on a keypair owned by Satoshi, that could informally be used to say, "The good client's SHA1 hash is xxxx"... but all the better if the client could retrieve the "best" client via https and confirm its hash so its average user doesn't have to know what a SHA1 is.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.

A lot of the "fantasy" ways of bringing down Bitcoin I can dream of, could be solved with one simple feature: the ability for Satoshi and perhaps a few others to cryptographically vouch for the soundness of any future revisions of the Bitcoin software, and a way for users to easily confirm the soundness of their client.

Many of the denial-of-service threats to Bitcoin are of the type that could be remedied by pushing out an upgrade to the software. The fact that the software MUST be upgraded in the future (e.g. to start breaking BTC into smaller decimals) is a sweet non-technical vulnerability that could be exploited by an adversary.

A coordinated effort to damage Bitcoin need only be a huge FUD campaign as to which is the true and correct client.

I suppose we may already have that in a roundabout sort of way: IIRC there is a Satoshi "message" feature based on a keypair owned by Satoshi, that could informally be used to say, "The good client's SHA1 hash is xxxx"... but all the better if the client could retrieve the "best" client via https and confirm its hash so its average user doesn't have to know what a SHA1 is.

No. Doing this would open up a new attack vector, by hacking into Satoshi's own systems to capture that keypair. As it is, that keypair isn't so valuable to an attacker.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

No. Doing this would open up a new attack vector, by hacking into Satoshi's own systems to capture that keypair. As it is, that keypair isn't so valuable to an attacker.

How are they gonna hack it off his system if he keeps it offline, encrypted, and physically secure?

That's a standard best practice for any powerful key like that.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.

No. Doing this would open up a new attack vector, by hacking into Satoshi's own systems to capture that keypair. As it is, that keypair isn't so valuable to an attacker.

How are they gonna hack it off his system if he keeps it offline, encrypted, and physically secure?

That's a standard best practice for any powerful key like that.

How do you, as a user downloading a program from someone on the Internet, know that you are talking to the real server for Satoshi's Bitcoin? If the vanilla client were able to do such a thing, no one would question why any other such a client couldn't do such a thing. Furthermore, how much trust are you willing to put into Satoshi, even if you can be certain that you are using the proper client? Satoshi might not be using best practices, or might be waylaid by some statist prosecuter and forced to divulge his secret key, or any number of other possibilites.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

No. Doing this would open up a new attack vector, by hacking into Satoshi's own systems to capture that keypair. As it is, that keypair isn't so valuable to an attacker.

How are they gonna hack it off his system if he keeps it offline, encrypted, and physically secure?

That's a standard best practice for any powerful key like that.

How do you, as a user downloading a program from someone on the Internet, know that you are talking to the real server for Satoshi's Bitcoin? If the vanilla client were able to do such a thing, no one would question why any other such a client couldn't do such a thing. Furthermore, how much trust are you willing to put into Satoshi, even if you can be certain that you are using the proper client? Satoshi might not be using best practices, or might be waylaid by some statist prosecuter and forced to divulge his secret key, or any number of other possibilites.

Satoshi would generate a certificate with the private key - one time - for each binary he wanted to certify as giving him warm fuzzies. That certificate, he could publish it any way he saw fit. It would not require persistent online access to the private key. Example, when you download a Windows update, your machine can validate all the downloads as genuine via the certificates they're sent with, without needing to knock on anyone's private key anywhere. The public key is all that's needed for validating certs. The private key is needed for making the certificate & nothing more.

as for whether I trust Satoshi, if he is being subject to "rubber hose cryptanalysis" for a key like that, it means Bitcoin is already suffering the very attack I envisioned, at which point Bitcoin has already got bigger problems by then. Hopefully, communications from the early bitcoin community (including yourself) have some way to be reliably differentiated from the noise so you can speak on his behalf, that's exactly what publishing a public key now would enable down the road.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.

Further, instead of Satoshi alone, how about a keypair for every Hero Member of the board as of today, January 2011? If a binary came accompanied with certificates from at least 50% (or some other reasonable percentage) of such individuals, it could be deemed good. Those Feds would have to do a lot more rubber hosing to succeed.

The notion I'm suggesting now, is that the bitcoin community at this very moment is probably as trustworthy as it's ever going to get. May as well add some protections to benefit from that.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.

Further, instead of Satoshi alone, how about a keypair for every Hero Member of the board as of today, January 2011? If a binary came accompanied with certificates from at least 50% (or some other reasonable percentage) of such individuals, it could be deemed good. Those Feds would have to do a lot more rubber hosing to succeed.

The notion I'm suggesting now, is that the bitcoin community at this very moment is probably as trustworthy as it's ever going to get. May as well add some protections to benefit from that.

Interesting idea, but this doesn't consider the possibility that hero members that may (or may not be) trustworthy today aren't corrupted or compelled in the future. Trust me, the feds aren't concerned about the number of those on their list once they get the go-ahead; they can hire as many Alabama-Lie-Detectors as they may need.

This also doesn't consider the possibility that hero members may not be willing to carry the burden of security.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Maybe it's OK now, but your ISP could force you to download a modified version because Sourceforge doesn't support HTTPS. Or someone could infiltrate bitcoin.org/Sourceforge. Satoshi should sign the releases.

The only really safe method is to keep a local version of the source, check the code changes for every release, and compile from that checked code.

The original Shareaza was taken over by ner' do-wells and the new product on sourceforge was full of malware. I remember switching BT clients immediately, and many unsuspecting people did an update which was "recommended" by the client almost immediately! It was like zer0day in reverse. We have to eventually use distributed methods to ensure validity of the client for bitcoin, possibly tying it to the same procedure as tx validations.

Then people using bitcoin will simply switch to Linux, or have a separate Linux partition just for bitcoin.If you use Linux only with software from signed repositories, it is virtually impossible to catch a virus.

You are thinking of the traditional garage made or botnet data thief virus that gets instantly detected and patched. You might want to brush up on the reality of actual state-level cybercrime or cyberwarfare.

Stuxnet is a weaponized virus. Its a scary example of what can be achieved against a countries infrastructure.

Luckily bitcoin is not a country

Fascinating. And a fine example of what I was talking about in the other thread. Thank you for your research. That is exactly the kind of attack I am speaking of. A well funded well organized intelligence community backed scorched earth attack on the bitcoins themselves. They'd only have to do it once and it would permanently wound the very notion of cryptocurrency despite the reality of any subsequent situation in much the same way as Chernobyl slaughtered nuclear power despite it over all being infinitely better for humanity than burning fossil fuels for power.

We have to do it right, and we have to do it right the first time or it will be the last time.

I actually think what Innomen is saying makes a lot of sense. Switching to Linux will not be possible for people who can barely operate Windows. It is not us, the technical people that need to worry about this, but since we try to convince more and more people to start using Bitcoin (for example I got a few of my friends into using Bitcoin, but most of them have no idea how it all works and I doubt they encrypt their wallet with TrueCrypt after every transaction and copy it to five different places), they will be the ones affected by the viruses. Once virus' authors realize there is money in it, they will save no effort to get to one's wallet.

Another VERY important aspect of this is that people need to be aware of the fact that after they copy their wallet into a safe place they should start using a new one. Why? Because most people make backup copies after a new transaction (I personally do that after a big transaction). Now, if an attacker or a virus manages to transfer coins from your account - your backup copy is useless. It's actually better if the virus corrupts your wallet instead of using it (if you have a backup). And, since the wallet is not encrypted, I suppose this is not impossible? Please correct me if I am wrong.

You are thinking of the traditional garage made or botnet data thief virus that gets instantly detected and patched. You might want to brush up on the reality of actual state-level cybercrime or cyberwarfare.

I know what You mean. I can still either run bitcoin as a different user, or better: run bitcoin in an encrypted virtual machine.This practically takes the risk of any hack down to zero.

That attacker would have to 0) Find a MASSIVE way to attack everybody at once before the 0-day is detected (not an easy thing to do).1) Crack my web browser (with Noscrtipt/Flashblock/Adblock installed, so it is not an easy task either)2) Find the correct virtual machine3) Hack into the virtual machine, breaking it's security also.

I **seriously doubt** that any 0-day will ever be able to do that.

And about Stuxnet: It ran on Windows. I don't put "windows" and "security" in one sentence.

Now I have:- Inside an encrypted virtual machine with only Bitcoin + backup scripts installed (no desktop).- Encrypted wallet.dat on the encrypted drive.- PGP signed backups on servers that use SSH keys + long password.- Firewall blocking all ports except Bitcoin in the virtual machine.

And about Stuxnet: It ran on Windows. I don't put "windows" and "security" in one sentence.

Not only did Stuxnet use four zero day exploits, only two of which were unknown; more analysis by actual experts has resulted in exactly the opposite conclusion of the media. Although this was certainly put together by a group of people with a wide knowledge base concerning their target, a nuclear fuel refinement facility, the actual programming displays some basic errors with regards to the construction of a computer worm intended to hide from detection. Either they were unaware of some old cloaking tricks better than what they chose to use, or the authors intended the worm to be discovered. Considering the evidence all together, the worm was probably written by a small middle-eastern government in a hurry with a strong motive to delay Iran; which seems to implicate Israel. However, Iran's facilty is still not running months after the discovery of Stuxnet, so the one that was found may have been a distraction for an even better cloaked version still hammering away at it's intended target. It was a very precise weapon, as well, very tightly targeting only the particular facility it intended.

If any GNU/Linux distro has four unpatched zero day exploits at the same time, I'll eat my hat.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

I see, so then all I have to do to get the average man off the street to safely adopt bitcoin (and declare war on the fiscal system) is teach them linux, cryptography, and vmware. >.> Why didn't I think of that?

I am so sick and tired of attitudes like this making all of open source look downright smug and mean. Not to mention devoid of vision or common sense. I'm so tired of this petty divisive clannish crap.

Newsflash: Not Everyone Is A Nerd And This Is Not A Personal Failing. (I'm reminded of ethnocentrism, but that's the wrong word.) Society is full of specialists. Demanding that everyone who wants to use something as basic as Currency adopt Your specialty is unrealistic and arrogant to put it mildly.

It reminds me of some ivory tower obsessive compulsive math professor demanding that children be required to pass calculus 4 before leaving grade school just because you happen to have a gift for numbers. Or some crotchety old fossil demanding that everyone should have to churn their own butter just because he can and does.

Bitcoin is unsafe so long as the wallet file system persists.

Think of it this way. If every single bit coin were legally treated like an image of child porn, how long would it take before they were all destroyed? The fact that the system allows bitcoins to effectively be destroyed is a huge, obvious, glaring, deal breaking, weakness. If it can't be coded around or even conceptualized around then bitcoin is dead.

You people don't seem to fathom the damage a functional crypto currency would do to government power, nor the lengths to which they will go to preserve that power. Think secret service anti-counterfeiting efforts times a billion.

Perspective: ultimately, we are attempting to usurp the power of the global financial industry and trying to talk people out of using dollars at the same time.

We are trying to unrig THE game.

Your technically skilled naivete would be adorable and entertaining if the loss humanity might incur (the wholesale rejection of virtual currency as unsafe thanks to a lousy first impression and poor initial marketing) as a result was not so severe.

Why don't you stop thinking about your ego for 30 seconds and think about humanity and it's future? This isn't about how smart YOU are! Its about making average people comfortable enough to trust their lives to this abstraction. This is about perception management along with ideological and cyber warfare.

Look at the damage controlled currency has done to history.

Quote

"Permit me to issue and control the money of a nation, and I care not who makes its laws." ~Mayer Amschel Rothschild

Are you really going to get all defensive and snide with newbies when we have a real chance to prevent that damage?

I guess you are.

Your children and their children will probably die slaves of the banking system like we both will because of it, but hey at least you got to feel like a computer god for a little while. Fair trade yeah? >.>

You know, it dawns on me, at this point people like you are a worse threat than the ones I've mentioned.

You're like the techs at Chernobyl that said yeah sure an RBMK graphite-moderated reactor design allows for melt down, but our awesome technical skill and professional vigilance will be enough to prevent disaster, we have no need to consider the much safer PWR design.

That would be an improvement, but the 'scorched earth' type attack wouldn't care to sign a transaction. However, any methods to hide the wallet.dat data by the client itself would be in the source code, and the attacker would know where to go to destroy that data.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Innomen, you are getting upset. Calm down. It is good for the community to have those who consider the weaknesses, but it is not neccessary that everyone agree on what to do about that. I agree that the threat is greater than can be perceived at this time, but I don't agree that changing the system to permit coin recovery or forcing a security model on the user is the answer. The real answer is that there must be many answers. The vanilla client is just that, if you see a security issue with it, change it and release the code. Some people will adopt your ideas, others will not. What makes the whole of Bitcoin at greatest risk to destruction from a single massive attack vector is that everyone uses the same base code. Using different OS's is only a stopgap measure. Backups of wallet.dat files are only a stopgap measure. We are aware that there is a risk to all of this, or many risks. You are being heckled mostly because you are presenting the problems from only one perspective, your own, and seem to know very little about how the system actually works. Not enough to offer any real solutions, at least not widely acceptable.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

That would be an improvement, but the 'scorched earth' type attack wouldn't care to sign a transaction. However, any methods to hide the wallet.dat data by the client itself would be in the source code, and the attacker would know where to go to destroy that data.

I think the improvement would be that wallet could be completely encrypted, so to send or accept any transactions, one would have to give a password.Still, that would not protect against keylogger attacks.

I think the improvement would be that wallet could be completely encrypted, so to send or accept any transactions, one would have to give a password.Still, that would not protect against keylogger attacks.

Would it be considered a bad thing for someone to setup a company that manages Bitcoin wallets for people. I don't mean someone with only 1 server in an office building, but more like multiple servers around the world. They all replicate to each other and transfer data securely among them.

Obviously you would have to trust these companies, but don't people already trust banks with their money?

Even with bank insurance, who can say that you are getting your money at the value the you should? You might just be getting newly printed money which effectively is not the same amount (from a true value perspective) as what you put in. Based on what I am reading, I believe Bitcoin overcomes that sort of manipulation. Just a thought and I could be wrong.

I think the improvement would be that wallet could be completely encrypted, so to send or accept any transactions, one would have to give a password.Still, that would not protect against keylogger attacks.

Would it be considered a bad thing for someone to setup a company that manages Bitcoin wallets for people. I don't mean someone with only 1 server in an office building, but more like multiple servers around the world. They all replicate to each other and transfer data securely among them.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Or one could just create a separate device running a highly secure OS with a simple bitcoin client, and with wireless enabled so that it could connect to the internet. With such a secured device viruses and other types of attacks on the wallet would be highly unlikely, as there would be no third party applications, and installation of additional software would be disabled.

Then the safety of the wallet would simply require one to be able to physically secure the actual device.

Or one could just create a separate device running a highly secure OS with a simple bitcoin client, and with wireless enabled so that it could connect to the internet. With such a secured device viruses and other types of attacks on the wallet would be highly unlikely, as there would be no third party applications, and installation of additional software would be disabled.

Then the safety of the wallet would simply require one to be able to physically secure the actual device.

Create a bitcoin space heater with 1 or 2 gpus and use powerline networking ?

Or one could just create a separate device running a highly secure OS with a simple bitcoin client, and with wireless enabled so that it could connect to the internet. With such a secured device viruses and other types of attacks on the wallet would be highly unlikely, as there would be no third party applications, and installation of additional software would be disabled.

Then the safety of the wallet would simply require one to be able to physically secure the actual device.

Create a bitcoin space heater with 1 or 2 gpus and use powerline networking ?

In winter you could have a nice foot warmer as well .

This would be so amazing. If you could a thermostat working roughly accurately a little heater/fan that paid back the electricity that it used in bitcoin would be the best thing ever (for cold feet and for bitcoin).

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.

I think the improvement would be that wallet could be completely encrypted, so to send or accept any transactions, one would have to give a password.Still, that would not protect against keylogger attacks.

Would it be considered a bad thing for someone to setup a company that manages Bitcoin wallets for people. I don't mean someone with only 1 server in an office building, but more like multiple servers around the world. They all replicate to each other and transfer data securely among them.

Actually... pretty much just like mybitcoin.com only there are several separate versions of them to avoid one site/company monopolizing the "trusted bank" structure. These companies can run internal transactions with other customers that use them to provide additional services such as insurance, escrow, etc. The only time any actual bitcoin transactions take place are when people send bitcoins outside of the institution of "trusted banks" - in which case the transfer cannot be insured by the "trusted bank" network.

Maybe I'm getting ahead of myself, but the only way I see bitcoin picking up pace is if merchants and consumers have ways of being protected from scams, etc. I like the clearcoin concept, but I think their structure is far from perfect. Their choice to not handle disputes doesn't make me feel any safer than if I were to just risk my coins. Being able to not use bitcoins that were meant for a purchase for 30 days, 6 months, or even 12 months wouldn't phase me if I were a hardcore con-artist. The point is to eliminate the buyer/seller beware worries, which clearcoin isn't doing. Anyway, that's a discussion for another topic.

Or one could just create a separate device running a highly secure OS with a simple bitcoin client, and with wireless enabled so that it could connect to the internet. With such a secured device viruses and other types of attacks on the wallet would be highly unlikely, as there would be no third party applications, and installation of additional software would be disabled.

Then the safety of the wallet would simply require one to be able to physically secure the actual device.

Create a bitcoin space heater with 1 or 2 gpus and use powerline networking ?

In winter you could have a nice foot warmer as well .

This would be so amazing. If you could a thermostat working roughly accurately a little heater/fan that paid back the electricity that it used in bitcoin would be the best thing ever (for cold feet and for bitcoin).

Well no, you choose the GPU that gets least hot (for the same hash rate), because you want the maximum BTC payout per watt. If you have a GPU that generates the same number of blocks without becoming so hot, you simply use two of them in your heater.

If you wanted something that got really hot, you would stick with CPU mining.

I would love to have one of these bitcoin heaters. It would boot directly into Bitcoin, and be shutdown simply by turning off the power. It would maybe have a handle attached for ease of transporting.

It should have solid state storage for robustness: probably just an internal USB socket that can take a 4GB USB flash drive (or maybe even two USB sockets in hot-swap RAID configuration for robustness and ease of backup).

There was one other attack against bitcoin, I've tried to write about it already, and somebody else explained the problem much better. But I can't remember where, I've looked and I can't find the forum post.

Is essence it is this (MiB=Men-in-Black):

1. MiB surreptitiously and slowly buy up lots of GPU's (reasonably cheaply - the entire BTC mining community is equivalent to about 200Ghps, one 5870 ~ 0.5Ghps, => only 400 5870s required, cost ~ $200k).2. everybody rejoices - the BTC network is getting stronger!3. MiB approach and exceed 50% of entire BTC net. 4. When MiB have, say, 80% of mining, they start to reject blocks generated by anyone else. First slowly, but increasing.5. Eventually, most, or all, blocks generated only by MiB.6. Community realises what's happened! Panic! Releases new client to blacklist MiB's cluster.7. MiB have already thought of this and have their cluster instantly distributed to new IP addresses, apparently from many different countries etc, behind Tor if you like.8. MiB use other methods to eliminate anyone else with any significant mining power.

Result:1. MiB now verify *all* transactions. MiB introduce a fee (=tax) on all transactions. MiB introduce some bureaucracy which must be followed before obtaining a BTC address, certainly requiring some form of ID.2. MiB now know exactly how much you earn, and when, and who you got it from.3. BTC's originating from a transaction pre-MiB are rejected until transferred to a new MiB-approved address in the presence of an MiB official.4. In short, BTC gives *unprecedented* economic power to MiB, exactly the opposite of what it sought to achieve.

Sorry if this attack has already been discounted, I'm an irregular visitor to the forum, and I can't find the previous threads discussing it. Please link there if you can.

There was one other attack against bitcoin, I've tried to write about it already, and somebody else explained the problem much better. But I can't remember where, I've looked and I can't find the forum post.

They wouldn't need to do it slowly. There's no way to block an attacker that has more than 50% of the computational power.

They wouldn't have control forever, though. It'd just be "downtime" for Bitcoin until control is regained.

They wouldn't need to do it slowly. There's no way to block an attacker that has more than 50% of the computational power.They wouldn't have control forever, though. It'd just be "downtime" for Bitcoin until control is regained.

I know the attacker with >50% power. But I'm talking about an attack that does not destroy confidence in bitcoin, just surreptitiously gaining power until it's too late to stop without everyone involved abandoning all their bitcoins and the bitcoin economy while STILL maintaining the BTC economy, just with MiB imposed taxes. Of course, if there is a multitude of parallel cryptographic currencies, then no problem. But if bitcoin is the only one... Tell me, what defense could the BTC community take against someone with >50% of the power, how would you regain control? IP blacklists hardcoded in the client? "Legitimate user" signing keys?

This seems like the most plausible attack to me also. I think the response will be up to Bitcoin's descendant currencies, in which incentives will be coded for all participants to be generators. This would naturally involve coded disincentives for generator farms and collectives that exist and weaken Bitcoin now.

The farms and collectives are already making one of the main strengths of Bitcon - a p2p decentralized currency network - not much more than a misleading advertising talking point. It's becoming more and more centralized, as more and more independent miners are forced out of generation, or into collectives...

There is little incentive for farms, collectives, and botnet to cheat. However, there are large incentive for the government to do so.

Could one for example hash a video showing the human operator at their console along with the stream of keystrokes and joystick and mouse etc movements, providing an audit trail demonstrating how hard it really was to generate the magickal bonusses to be associated with the supposedly awesome magickal sword their efforts might conceivably gain for them should they turn out to be the killer of the boss monster in the main-chain timeline of the truly once you kill that boss that boss is dead universe in which they and other awesome workers perform the work of eliminating bosses and their minions?

-MarkM- (From a Freeciv Galactic Milieu perspective, I'd guess the Hacker nation might be the people to ask such things of...)

There was one other attack against bitcoin, I've tried to write about it already, and somebody else explained the problem much better. But I can't remember where, I've looked and I can't find the forum post.

Is essence it is this (MiB=Men-in-Black):

Sorry if this attack has already been discounted, I'm an irregular visitor to the forum, and I can't find the previous threads discussing it. Please link there if you can.

I assume this attack is technically feasible, but the one problem I see is that it discounts the way government works. If they do take action against Bitcoin, it will probably be open and direct. They will legislate and demonize it, as they do with anything they don't like.

I assume this attack is technically feasible, but the one problem I see is that it discounts the way government works. If they do take action against Bitcoin, it will probably be open and direct. They will legislate and demonize it, as they do with anything they don't like.

I think wikileaks has clearly shown us that governments have no problems with taking secret and indirect action when it suits them. I suppose my question is, *if* MiB should attack bitcoin as I described, *would* it give them unprecedented power over the economy? What defences against this attack exist, short of *everybody* in the BTC network buying a quad 5970 setup (or whatever gives most !/$ at that time). Would that even be enough against MiB dedicated special-purpose custom-built superhashers? There's an idea, how cheap would it be to build dedicated purpose hardware just for hashing. GPU's are great, but they're not specifically designed to perform integer hash ops. Surely we could do better? Anyone?

Quote from: imanikin

more and more independent miners are forced out of generation, or into collectives...

They wouldn't need to do it slowly. There's no way to block an attacker that has more than 50% of the computational power.They wouldn't have control forever, though. It'd just be "downtime" for Bitcoin until control is regained.

I know the attacker with >50% power. But I'm talking about an attack that does not destroy confidence in bitcoin, just surreptitiously gaining power until it's too late to stop without everyone involved abandoning all their bitcoins and the bitcoin economy while STILL maintaining the BTC economy, just with MiB imposed taxes. Of course, if there is a multitude of parallel cryptographic currencies, then no problem. But if bitcoin is the only one... Tell me, what defense could the BTC community take against someone with >50% of the power, how would you regain control? IP blacklists hardcoded in the client? "Legitimate user" signing keys?

Regaining control is as simple as regaining the majority of network power. This kind of attack is dependent upon either honest node operators not noticing the shift in computational powers, or simply not reacting. Neither case is particularly likely, but the idea that honest nodes wouldn't be able to quickly respond once such a takeover of the system was apparent is silly. There are numerous major players just on this forum that would have the ability to quickly add power to the network, if they had some compelling reason to do so at a loss, by purchasing & setting up bitcoin daemons on 'the cloud'. There are quite a few people with much to lose under such a situation as may be willing to spend some of that in order to protect the remainder, and many more still willing to contribute to that end to protect their own smaller nesteggs. Ultimately, it then all comes back to how long can an attacker maintain the advantage; and which group can continue to commit escalating resources, the coordinated attacker or the collective of honest bitcoin nodes. No matter how much computational power any particular government may have, it is practically impossible for any single government to be able to possess >50% of all the computational power of the Internet combined, or even >50% of all the computational power available to all of the world's governments combined. Bear in mind also, if Bitcoin is bad for the nation on top of the fiat currency scheme (USA) then it is, more likely than not, good for almost all of the others. A slow moving attack upon the Bitcoin network from one government is likely to prompt the (open or cladestine) support of many other governments eventually.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Once it comes down to some kind of war like that, the economics of different methods and approaches and tools of war presumably start to enter into the matter.

One advantage of a war of processing power over a war of intercontinental ballistic missiles, from leftist perspectives that consider peacenicks doves and such to be a form of leftness, might be an appearance of less direct medical-triage type "damage" amongst the "collateral damage" of such tools/methods.

One think I liked about using Freeciv was it's inclusion of "nations" that actually correspond to some of the "nations" currently existing on Earth. Splits in the "chain" could actually have use, as until each "nation" has a currency in the system splits might be as good a means as any of implementing a "new" currency, and contrariwise each time a split occurs if there are any "nations" that do not yet have a chain of their own they could adopt one of the branches of the split.

From some perspectives splitting chains could look much more appealing than actually sending soldiers off to die or even battlebots off to be forcibly dismantled or maybe even co-opted.

Basing proof of work on work more do-able by machines than by humans though seems a kind of capitalism-biassed approach ab initio, is it a deliberate attempt to ensure those who employ robots an advantage over those who employ humans?

Government crackdowns acted like something of an evolutionary pressure; for every filesharing network that was successfully destroyed, a new generation of better, stronger ones sprang up.

Napster relied on a single centralised server. The government shut down the server. Result? Several Napster clones that could support multiple servers. Then the government started taking down servers one by one. Result? Serverless technology. Then the government started prosecution of individual users. Result? Proliferation of VPN providers and pseudonymous p2p. And so on....

I doubt we would have a lot of innovative technologies today (eg. i2p, tor, bittorrent) if governments simply had left Napster alone. Talking about unintended consequences!

Conclusion:

Government may succeed in destroying the current block chain. It may even succeed in destroying the current implementation of the Bitcoin protocol. But it will never destroy the source code, the meme, the spirit, and the community. The p2p cryptocurrency genie is out of the bottle.

The one thing I doubt is that the p2p bitcoin community is as strong as the p2p file sharing community. A p2p copyright infringer gets free movies, music, books and computer applications for life. A p2p bitcoin member gets a vague notion that they are somehow propping up their own freedoms.

I used to think that people would not accept the erosion of privacy by corporations tracking our every move on the web.. turns out many people are fine with this, as long as they get their equivalent of "the dancing bear", they don't mind relinquishing all their rights. I've learned, that in today's age, when push comes to shove, most people are pretty thin skinned.

So, what I think will happen, is after the US government has cleared it with all the lobbyists and other people of importance, they'll do a domain name seizure of mtgox.com, as well as some other sites, probably 3 to 6 months from now. Then, all the commercial vendors that accept bitcoin will start to dry up, rather then be targeted.

The value of bitcoin will plummet. People will be afraid to run clients, and besides, without the "dancing bear", why would they?

So, bitcoin will then go underground, and be used primarily for illegal activities. It may hang on, it may be replaced with something else. It's too far in the future to know exactly what will happen. But I don't think that it stands a chance in the current shape and form against the powers that be.

The one thing I doubt is that the p2p bitcoin community is as strong as the p2p file sharing community. A p2p copyright infringer gets free movies, music, books and computer applications for life. A p2p bitcoin member gets a vague notion that they are somehow propping up their own freedoms.

I used to think that people would not accept the erosion of privacy by corporations tracking our every move on the web.. turns out many people are fine with this, as long as they get their equivalent of "the dancing bear", they don't mind relinquishing all their rights. I've learned, that in today's age, when push comes to shove, most people are pretty thin skinned.

LOL.

Bitcoin is economically more valuable than USD in some ways. In some way it is not.

But we only do it for freedom? Naw.

Quote

So, what I think will happen, is after the US government has cleared it with all the lobbyists and other people of importance, they'll do a domain name seizure of mtgox.com, as well as some other sites, probably 3 to 6 months from now. Then, all the commercial vendors that accept bitcoin will start to dry up, rather then be targeted.

Worried about domain seizure? Somebody came up with namecoin to solve that problem.

The exchange shutdown threat is already known by the community as a problem. Not sure if somebody is working on the problem though someone always propose a solution. However, it's hard for the currency to have a decentralized exchange system because the lack of critical mass.

Remember, the bitcoin community knows more about the weakness and strength of the technology more than anybody in the world. Any criticism or problem you think you might have for bitcoin, the community probably already knows.

Bitcoin is economically more valuable than USD in some ways. In some way it is not.

But we only do it for freedom? Naw.

The point is that the P2P bitcoin network is not nearly as strong as a P2P filesharing network, which is a huge problem. Sure, if you happen to be the few with thousands of dollars invested in bitcoin, you really want it to succeed. But if the government cracks down, there is no great incentive for people to want to *buy* bitcoin which is the only thing that gives the market value.

Worried about domain seizure? Somebody came up with namecoin to solve that problem.

The exchange shutdown threat is already known by the community as a problem. Not sure if somebody is working on the problem though someone always propose a solution. However, it's hard for the currency to have a decentralized exchange system because the lack of critical mass.

Remember, the bitcoin community knows more about the weakness and strength of the technology more than anybody in the world. Any criticism or problem you think you might have for bitcoin, the community probably already knows.

I just read the anonymous exchange.. it revolves around the idea that the public is going to be interested in sending in a photocopy of their ATM card and pin to a random person who has declared himself a bitcoin exchange. Not likely.

namecoin.. maybe, one day, years from now that would have an effect. But not today.

Bitcoin is economically more valuable than USD in some ways. In some way it is not.

But we only do it for freedom? Naw.

The point is that the P2P bitcoin network is not nearly as strong as a P2P filesharing network, which is a huge problem. Sure, if you happen to be the few with thousands of dollars invested in bitcoin, you really want it to succeed. But if the government cracks down, there is no great incentive for people to want to *buy* bitcoin which is the only thing that gives the market value.

Worried about domain seizure? Somebody came up with namecoin to solve that problem.

The exchange shutdown threat is already known by the community as a problem. Not sure if somebody is working on the problem though someone always propose a solution. However, it's hard for the currency to have a decentralized exchange system because the lack of critical mass.

Remember, the bitcoin community knows more about the weakness and strength of the technology more than anybody in the world. Any criticism or problem you think you might have for bitcoin, the community probably already knows.

I just read the anonymous exchange.. it revolves around the idea that the public is going to be interested in sending in a photocopy of their ATM card and pin to a random person who has declared himself a bitcoin exchange. Not likely.

namecoin.. maybe, one day, years from now that would have an effect. But not today.

So, I don't see anything here that would refute my prediction.

There are bitcoin exchanges on tor and i2p.

I can also see services for cash buying of bitcoins getting a massive boost if other methods are prevented. Can a government prevent you from sending cash in an envelope ?

So, what I think will happen, is after the US government has cleared it with all the lobbyists and other people of importance, they'll do a domain name seizure of mtgox.com, as well as some other sites, probably 3 to 6 months from now. Then, all the commercial vendors that accept bitcoin will start to dry up, rather then be targeted.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Regardless if some people out there are willing to send cash in an envelope or give someone a copy of their ATM card, I don't think most of the general public will.

I think this is the biggest problem, in order for BTC to really succeed, it has to get in the hands of as many people as possible, and the current options are not good enough.

Since the hurdle of transferring large amounts of cash is really difficult, it would probably be better to work on really small amounts.

Here is an idea on that... suppose

1. the 0.01 minimum transfer limit built into the current BTC clients was eliminated, and was pushed back to the ultimate limit of 0.000001. I know you can technically do this, but the current clients don't let this happen.2. a service was setup where people could mine for bitcoin with a more predictable, constant flow rate, so they'd get 0.000001 bitcoins per minute or something, which would be siphoned off by the main server.

If online games started using very small amounts of bitcoin as currency, you now have an easy way to trade it. That'll never happen as long as sub-penny amounts can't be traded.

I mean there is, what a $6 million float out there? Hardly a world currency. If BTC wants to be one of the big currencies, it should to start acting like one, and treat 0.000001 bitcoins not as a meaningless small value, but a tangible one. It's like if a country that was aiming for the started up with a brand new fiat currency where the smallest value is $1,000,000 bills.

Sorry about the negativity.. I think it's a really good idea and there is a lot of value to it. I'm thinking about investing in it, which is why I voiced these concerns. But, I'd like to see some adequate defense against hostile action, and there doesn't seem to be any, right now.

Regardless if some people out there are willing to send cash in an envelope or give someone a copy of their ATM card, I don't think most of the general public will.

I think this is the biggest problem, in order for BTC to really succeed, it has to get in the hands of as many people as possible, and the current options are not good enough.

Since the hurdle of transferring large amounts of cash is really difficult, it would probably be better to work on really small amounts.

Here is an idea on that... suppose

1. the 0.01 minimum transfer limit built into the current BTC clients was eliminated, and was pushed back to the ultimate limit of 0.000001. I know you can technically do this, but the current clients don't let this happen.2. a service was setup where people could mine for bitcoin with a more predictable, constant flow rate, so they'd get 0.000001 bitcoins per minute or something, which would be siphoned off by the main server.

If online games started using very small amounts of bitcoin as currency, you now have an easy way to trade it. That'll never happen as long as sub-penny amounts can't be traded.

I mean there is, what a $6 million float out there? Hardly a world currency. If BTC wants to be one of the big currencies, it should to start acting like one, and treat 0.000001 bitcoins not as a meaningless small value, but a tangible one. It's like if a country that was aiming for the started up with a brand new fiat currency where the smallest value is $1,000,000 bills.

Sorry about the negativity.. I think it's a really good idea and there is a lot of value to it. I'm thinking about investing in it, which is why I voiced these concerns. But, I'd like to see some adequate defense against hostile action, and there doesn't seem to be any, right now.

Regardless if some people out there are willing to send cash in an envelope or give someone a copy of their ATM card, I don't think most of the general public will.

I think this is the biggest problem, in order for BTC to really succeed, it has to get in the hands of as many people as possible, and the current options are not good enough.

This should scream "profit opprotunity" to just about anyone.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

I don't think it's meaningless, and it's missing a very important market that could provide a much needed protection against attack.

There are millions of transactions that go on, that are worth far less than $0.01 and are represented by difference payment schemes: * money online games such as WOW use,* file servers that make you wait 90 seconds before you download anything,* message boards where there is very little signal-to-noise ratio you have to scour to gleen any useful information on them, because there is no one there to clean it up.

In each of these, you are paying in terms of grinding needed to do to have fun in a game, time spent waiting, aggravation grokking or doing busy work. If you can somehow get bitcoin to replace these annoyances, it would be a lot more valuable and harder to shutdown. If this could be translated into a few micro bit-cents made by running a javascript app for an hour or so, you would get many more people interested in keeping bitcoins alive.

As it is now, if the US government does go after it, and the only value is to people that are comfortable with sending cash through the mail, that could spell the end quite quickly.

Currently, I think the extra decimal places serve their purpose best as future-proofing. Allowing free transactions at such small amounts opens the door to denial-of-service type attacks, flooding the network with lots of small denomination, normal size transactions. Unless another deterrent is implemented, this will continue to be the case. Thus, I think the best way is to "unlock" smaller payments as the exchange rate increases and/or as applications for ultra-micro-payments develop. For instance, there is talk about decreasing the minimum payment required to qualify as a free transaction to .001 BTC.

There are other options, such as payment processors which do not broadcast all transactions on the network, only those entering and leaving their network (like MyBitcoin). These could accept and transmit payments smaller than those accepted by the Bitcoin network as a whole without the issues the distributed system has.

I think the Achilles heel of Bitcoin is the wallet.dat file. Lets face it, not everyone is a computer scientist. Most people will be running Windows, will not encrypt their wallet file and will not realise that they will loose their money if this file is lost or stolen.

This mainly affects confidence in the system. If someone gets a virus and looses money, they are not going to use Bitcoin again. Likewise if they delete it by mistake, etc.

Why can't the client just automatically encrypt the wallet file and ask the user for a password?

Why can't the client just automatically encrypt the wallet file and ask the user for a password?

It can, it just doesn't. It's on the future features list. Feel free to contribute a patch.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Before discovering this thread, I posted an hypothetical attack against Bitcoin that is similar to one of the attacks described here (MIB attack). I not only think this attack is feasible, but unavoidable sooner or later for the reasons explained here https://forum.bitcoin.org/index.php?topic=12435.0

There are millions of transactions that go on, that are worth far less than $0.01 and are represented by difference payment schemes: * money online games such as WOW use,* file servers that make you wait 90 seconds before you download anything,* message boards where there is very little signal-to-noise ratio you have to scour to gleen any useful information on them, because there is no one there to clean it up.

Seconded. If we're trying to bootstrap a completely new economy we should use our strength, which is "free" micro payments, something other forms of currency and value exchangers cannot do today.

It would open up new opportunities for Bitcoin immediately.

(On topic: I consider the US-government-will-take-control-over-more-than-50%-of-the-network scenario to not only be likely, I'm quite sure Homeland Security is already working on it)

Manipulation of price for bitcoin is not the problem, but rather the ability for price information is the problem. Shutting down liberty reserve and other way to exchange currencies for bitcoin meant that people no longer have any way of price estimation for bitcoin.

Exactly.

Bitcoin needs to be removed from this dependency for valuation and find its price in terms of real goods and services. Not finding its price through the dollar or other currencies.

Of course, this (unlikely) scenario is part of the motivation for regular blockchain benchmarks being encoded into the source code of new releases. So your attacker would still have to come up with a fake blockchain that not only matched those benchmarks precisely without violating any of the other valid block rules on any of his fake blocks and have such a blockchain ready that was at least as long as the benchmark shipped in the latest version before the standing network would receive it.

I think we can all agree that the NSA already has its fake chain ready to launch at any moment if they deemed Bitcoin a serious danger to the US economy. They probably started working on it from day one, even. It would be identical to the real one except that it's a couple of blocks longer. Those couple of blocks rip everyone from their coins. End of story.

And if any copy of the real blockchain were to be reintroduced to the network before the fake one could develop a greater total proof-of-work, the real blockchain would force a network split that would eventually destroy the fake one.

Only if the real one posses more total computer power than the fake one, which is not the case with the NSA.

I think we can all agree that the NSA already has its fake chain ready to launch at any moment if they deemed Bitcoin a serious danger to the US economy. They probably started working on it from day one, even. It would be identical to the real one except that it's a couple of blocks longer. Those couple of blocks rip everyone from their coins. End of story.

Hahaha... I think we can all agree that your predictions have not been all that accurate so far.

Is it the CIA or NSA that has this technology available? In another thread you claimed it was the CIA. Perhaps all of the TLAs are collaborating on this project?

Why would they duplicate the block chain? It makes no sense to do so, they would just dedicate all of their computing power to the NEXT block, and then the one after that, etc.

How would they transfer everyone's money to their account? That would require a break in ECDSA or at least secp256k1, which is possible but highly unlikely (IMO).

*facepalm* Why do I bother? Did you even read what I said? It's not that simple. How do I know where I copied it is safe? You are demanding that everyone who uses the currency be tech savvy. I don't care how reasonable you think that demand is because you happen to be tech savvy, it isn't.

Moving a file to a USB-stick is not difficult...

But yes the user friendliness of the client need to evolve a lot when it comes to managing the wallet data.

If we're trying to bootstrap a completely new economy we should use our strength, which is "free" micro payments, something other forms of currency and value exchangers cannot do today.

Just beware that Bitcoin can't actually do free micro payments, because that would open us up to a DOS attack. We can do fairly cheap ones, though.

Micro-payments shouldn't really need the identity protect bitcoin offers anyway. No one cares about people trading in black markets for a couple of bucks here and there, everyone do it all the time and in many western countries it is even legal since the tax authorities don't want to audit that shit anyway they set a minimum level of trading that is allowed before you have to disclose the activity.

Also the loss is minimal if you loose an account you only use for micropayments. So we will probably do just fine with centralized authorities for micropayments backed by BitCoin. Where the BitCoin don't actually move until you choose to withdraw or deposit from the micropayment system. Think I have seen some service like this already?

My interest in Bitcoin has very little to do with identity protection and very much to do with the possibility to do "instant" regulation-less P2P transactions in all sorts of circumstances where our current economic systems makes it difficult.

I dislike carrying cash, and I feel sorry for merchants every time I pay for something worth only a few dollars with plastic since I know most of their profit is being eaten by banks claiming to perform a service I fail to see is needed.

My interest in Bitcoin has very little to do with identity protection and very much to do with the possibility to do "instant" regulation-less P2P transactions in all sorts of circumstances where our current economic systems makes it difficult.

I dislike carrying cash, and I feel sorry for merchants every time I pay for something worth only a few dollars with plastic since I know most of their profit is being eaten by banks claiming to perform a service I fail to see is needed.

Is this maybe the reason for hostility from the established businesses / political lobbying? Wouldn't a lot of status quo transfer profits disappear if there is a more economical alternative on the market?

Disclaimer: Postings of Cloud9 are only individual views of opinion and/or musings and/or hypothesisses. On a non-authoritative, peer-to-peer public forum, you do not need permission from Cloud9 to derive your own conclusions or opinions, so please do. Calculations and assumptions to be verified.

If you want to understand the hostility, I recommend watching this video. He gives some very concise answers to the questions...

What is the Federal Reserve?How did it come to be?What is it supposed to do?Does it do what it is supposed to?What does it actually do?

Answers to these questions may shed light on why there is a relatively small group of people in this country that control a vast amount of resources and will do nearly anything in order to maintain that control.

tl;dw version:

The "federal" "reserve" is banking cartel blessed by law and is neither "federal" nor "reserve". It is the result of a secret (at the time) meeting of bankers that represented a quarter of the world's wealth who found competition to be too difficult. The system they designed was created to benefit exactly two parties... members of the cartel and the government to which it was to be pitched. The mechanism for this is twofold...

1) The government receives free money from the federal reserve by honoring fake checks.2) The federal reserve bolsters the practice of fractional reserve banking to allow banks to create money out of nothing and charge interest on it.

Who are the losers in all of this? Everyone else. This system is the cause of the dollar's 95% loss in spending power over the previous 100 years.

My interest in Bitcoin has very little to do with identity protection and very much to do with the possibility to do "instant" regulation-less P2P transactions in all sorts of circumstances where our current economic systems makes it difficult.

Why does it have to be P2P? A centralized service can do micro-transactions much faster and cheaper then any P2P network. It would be almost as anonymous as bitcoin anyway since you couldn't do anything with the services logs other then link the micro-transaction in account together and maybe see which bitcoin address was used to fund said account. You could just start multiple micro service accounts ... and it is all good.The real downside to centralized service is if it gets seized or shut down. But it doesn't matter that much here since people will not have a balance higher then the smallest amount that is cost effective to transfer in the bitcoin protocol itself anyway.

Also it probably wouldn't be that hard to refund everyone before it gets shut down anyway. Bitcoin is somewhat easier to dump when the cops show up then say gold...

Also it probably wouldn't be that hard to refund everyone before it gets shut down anyway. Bitcoin is somewhat easier to dump when the cops show up then say gold...

This could work. A bitcoin bank intended for rapid, small transactions between users, wherein every user has a "panic" address that his balance can be dumped to if the feds show up with a warrant for the servers. There could be a foot button under the attendent's desk to push when they walk up, and by the time they can walk over to unplug the router the entire value of the bank has been "withdrawn".

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

What if the US instead saw this as an oportunity to secure their wealth by owning most of the bitcoins in the world?

Who is the "US" in this context?

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."